Population Growth + Inflation Doesn’t Add Up for Texas

Imagine you move into a new house only to discover that the ceilings are only 5 feet high, forcing you to walk around hunched over. You would be outraged, uncomfortable, and unable to use your home to its full potential. There is a real danger that future legislators may find a similarly restrictive ceiling on the state budget if a proposed constitutional amendment becomes law.

I’m referring to a proposal to further restrict the artificial “ceiling” that limits the amount Texas lawmakers can invest in education, health care, transportation, and more. Last week Lt. Governor Dan Patrick announced his support in a press conference for legislation that would limit state spending to population growth plus inflation. SB 9 and SJR 2, sponsored by Senator Kelly Hancock, will receive a hearing in Senate Finance on Tuesday, March 17.

The Texas Constitution has required a spending growth limit for decades, and we can all agree that the state should be prudent with its use of our tax dollars. The current constitutional spending limit is based on the strength of our economy, but these proposals would limit spending according to an arbitrary formula that doesn’t take the state’s actual needs into account. The “population + inflation” formula is especially dangerous because it ties the hands of elected officials so they can’t make smart investments in schools, transportation, higher education, health care, and other areas that Texas businesses and families depend on to compete and succeed. This gimmick has been tried elsewhere – and has failed miserably.

There is already a backstop to prevent the state from spending too much; the official comptroller’s revenue estimate dictates how much the state has to invest, and the budget does not exceed that. The spending-growth limit is more arbitrary, and the proposals being considered in Senate Finance this week would only make it more so.

Our elected representatives should not be forced to make arbitrary investment decisions. Rather, they should have the freedom to evaluate the state’s needs and craft a budget accordingly. Then they can stand tall to make the investments we need for the future of Texas.

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all.
CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds
to reach their full potential. We dare Texas to be the best state for
hard-working people and their families.